EU set to give Ireland until 2014 to meet its budget deficit target

irish_bob

NewDubliner wrote: »

so are private sector workers supposed to be happy about the prospect of further tax hikes...if the government raids their pension fund again, and takes out big loans to bail out the banks and artificially support the property market and then sticks them with the interest bill and huge losses on the investments?

you,ve managed to retype the exact same post over 1500 times , some achievment , admirable in a twisted sort of way

murphaph

NewDubliner wrote: »

And how is this investment model doing at present? Where do the profits come from?

The returns come from the stock market and other investments (precious metals, cash, property etc.)

NewDubliner wrote: »

Does the maximising of profit for these pension schemes lead to increased cost of goods and services for other people?

They are just an investment vehicle. They generally give a far better return than simply putting your money on deposit with a bank. There is risk however and as one ages one generally starts to move their pension into less risky avenues-away from stocks and into cash.

NewDubliner wrote: »

You're deliberately trying to mislead people into thinking that most of the PS don't pay full PRSI.

No I'm not. Why not just tell us what proportion of the PS pay class A PRSI if you know. If you don't know, then drop it.

NewDubliner wrote: »

How much would be charged by way of administration fees?

Normally when one is employed by the likes of IBM, the company picks up the management fee so long as you remain working for them. The government could do likewise for public servants. That would be fair enough to me. You can transfer a recognised (by Revenue) defined contribution pension lump sum from one employer to the next and carry on. You cannot take the pension early anymore (or cash out when you leave a company)-you must wait until you are at least 55 I believe.

NewDubliner wrote: »

Are the returns guaranteed?

Of course not. It's a defined contribution scheme.

NewDubliner wrote: »

Does the employer also make a contribution?

Yes, the employer typically pays 5% of your salary and you pay 3%. These are figures from my last pension in Ireland.

NewDubliner wrote: »

Are the investments ethical?

Not by default but I believe nowadays you can specify that you want an ethical fund. You can in fact manage the pension directly if you like with many schemes (online) and move your investments into any area you like. The majority of folks let the fund manager decide the proportions for them however.

NewDubliner wrote: »

Why would anyone with a defined benefit scheme, contractually agreed with their employer, switch to a defined contribution scheme?

Because the defined benefit scheme costs the taxpayers of Ireland too much. It is unfair that the best private pension available to someone outside the public service comes nowhere near the defined benefit of a public service pension, yet those workers in the private sector are paying for the public sector defined benefit pensions. It's just a question of fairness, do you not agree we should all be on the same pension playing field??

By the way, I wasn't admiring the UK's achievements as the world's dominant force for a good couple of centuries, just stating as fact that it was done without a public sector.

NewDubliner

murphaph wrote: »

The returns come from the stock market and other investments (precious metals, cash, property etc.)

That's a bit coy. Your pensions costs somebody else money and you don't care about the ethics of how the money is found. Yet, public-sector pensions also cost somebody else money, based on democratic, legal taxation and you consider that to be wrong.

You've also batted past the wretched situation of private sector workers whose pension contributions have vanished because of the unreliability of their schemes. Why on earth would you hold up such a plan as an ideal and try to impose it on others?

You have not answered the question about fees and costs. How much is charged by 'pension advisors', do they get it up front or is it performance based?

murphaph wrote: »

No I'm not. Why not just tell us what proportion of the PS pay class A PRSI if you know. If you don't know, then drop it.

Is this because the answer might undermine your demand?

murphaph wrote: »

Of course not. It's a defined contribution scheme.

This is the essence of your proposal. A defined contribution with a dubious return.

murphaph wrote: »

Because the defined benefit scheme costs the taxpayers of Ireland too much. It is unfair that the best private pension available to someone outside the public service comes nowhere near the defined benefit of a public service pension,

You're certain that this is true? I hear bank pension schemes pay out quite well.

murphaph wrote: »

It's just a question of fairness, do you not agree we should all be on the same pension playing field??

While the 'financial services' industry is up in the corporate box eating and drinking our contributions?

murphaph wrote: »

By the way, I wasn't admiring the UK's achievements as the world's dominant force for a good couple of centuries, just stating as fact that it was done without a public sector.

And by asset-stripping the monasteries.

seangal

murphaph wrote: »

Bullsh!t. You might pay 2/3 against the taxpayers' 1/3 or something but it's a defined benefit pension so the total cost for every pensioner is UNKNOWN until they die. Therefore you HAVE NO IDEA how much of your pension you are contributing towards, but I can guarantee you that if you have an average life expectancy it will not be anywhere near 2/3.

You should all be on defined contribution schemes and pay PRSI A and be entitled to the state pension. This is the sort of reform that's needed. Bring the public sector into line with the private sector vis-a-vis pensions and then that old chestnut is dispensed with and none of you public sector workers would have to hear it again. You wouldn't like a defined contribution pension compared to your defined benefit one (with tax free lump sum payment, that doesn't exist in the private sector).

If you take the dept of education pension bill today for retired people there is more going into the fund than is being paid out
All public sector sonce 1995 pay class A PRSI but we dont get the state old pension yet we pay PRSI
So we are now paying PRSI + pension levy + 6% of income before pension levy which for me is €200 a week
i have said it before if state want to pay me back that for the last 7 years and stop taking €200 off me a week they can have there pension i will have the mortgage payed off and will invest the rest for my old age

seangal

murphaph wrote: »

The public sector should all pay class A PRSI and be entitled to a state pension. They should also have to join a defined contribution scheme (similar to almost any large multinational employer in the private sector) and take their chances on the stock market like the rest of us. Why should the ordinary workers of the future guarantee your overly generous defined benefit scheme?

but we are also funding the rich in the private sector who put millions in to there fund and write it off against tax
what you going to do about that??????????

seangal

This should end all the crap about pension
I did not take the job i have for the pension and being honest i did not even know what pension i would get.
Wednesday November 11 2009 independent


In view of the prevailing wisdom that public servants have 'Rolls Royce' pensions, it's surprising that the recent Report of the Comptroller and Auditor General on Public Service Pensions didn't make waves in the news. Perhaps it's because the figures it provides don't actually back up the 'Rolls Royce' theory.
The C&AG put the employer cost of a primary teacher's pension at 7.2pc of salary, a far cry from 19.4pc in the last benchmarking report. Part of the discrepancy is explained by the inclusion of the recent pension levy.
But the wilder figures in excess of 30pc which have been bandied about seem unbelievable. There is also an assumption underpinning the 7.2pc figure that the teacher will have 40 years' service to achieve full pension.
Anything less than that means a smaller pension but also a reduced cost. The same rule applies to nurses, most of whom retire with, on average, little more than 20 years's pensionable service and so receive a pension of only a quarter of salary. The 'Rolls Royce' is starting to look a little rusty now. But consider this: every insured worker in the country is entitled to a guaranteed State pension. It is possible for a private sector worker to retire on a higher State pension than a public sector worker.
The main problem with most of the figures quoted for the market value of public service pensions is that they assume that the way private pensions are provided is the ideal pension system.
But here comes shock number two. The State isn't just a more effective provider of pensions than the private sector, it is also more cost efficient.
Public sector pensions are provided on a pay-as-you-go basis. There are no management fees taken out, no administration charges siphoned off and no hidden costs of trading deducted. Every cent that public servants and the taxpayer put into public service pensions gets paid out in pension payments. The system uses the existing payroll infrastructure and thus is virtually free of administration costs. Not so private pension funds.
And on top of these fees and charges there is the pension fund money lost on the stock market. In 2008, Irish pension funds lost 37.5pc of their value, although some of this has been recovered this year.
Some private sector workers have looked at the losses incurred by their pension funds and asked "why haven't public sector workers taken a hit too?" They should have asked: "What happened to my money?"
Because a 37pc loss wasn't inevitable. The OECD report Pensions at a Glance 2009 showed that the performance of Irish pension funds in 2008 was the worst of all 30 countries surveyed. The reason was two-thirds of Irish funds were invested in risky equities compared to a little over one-third in other countries.
However, the really shocking statistic in the OECD report was this: more than 30pc of Ireland's pensioners live in poverty. An enhanced State pension available to all is a necessity.
Public servants do not have 'Rolls Royce' pensions and as the C&A report shows, they cover most of the cost of their pensions through their own contributions. The real pension scandal is that many private sector workers don't even have 'bicycle' pensions in spite of years of sustained growth and increased productivity.
In between death and taxes, those two great certainties, comes old age and the need for a pension. It's time to decide how serious we are about an old age free from poverty for us all.
Irish Independent
now can we shut up about pensions and get back to the pay cut
Unions plan second strike before budget
i feel that this goverement is about to fall because of public sector strike action

murphaph

seangal wrote: »

This should end all the crap about pension
I did not take the job i have for the pension and being honest i did not even know what pension i would get.
Wednesday November 11 2009 independent


In view of the prevailing wisdom that public servants have 'Rolls Royce' pensions, it's surprising that the recent Report of the Comptroller and Auditor General on Public Service Pensions didn't make waves in the news. Perhaps it's because the figures it provides don't actually back up the 'Rolls Royce' theory.
The C&AG put the employer cost of a primary teacher's pension at 7.2pc of salary, a far cry from 19.4pc in the last benchmarking report. Part of the discrepancy is explained by the inclusion of the recent pension levy.
But the wilder figures in excess of 30pc which have been bandied about seem unbelievable. There is also an assumption underpinning the 7.2pc figure that the teacher will have 40 years' service to achieve full pension.
Anything less than that means a smaller pension but also a reduced cost. The same rule applies to nurses, most of whom retire with, on average, little more than 20 years's pensionable service and so receive a pension of only a quarter of salary. The 'Rolls Royce' is starting to look a little rusty now. But consider this: every insured worker in the country is entitled to a guaranteed State pension. It is possible for a private sector worker to retire on a higher State pension than a public sector worker.
The main problem with most of the figures quoted for the market value of public service pensions is that they assume that the way private pensions are provided is the ideal pension system.
But here comes shock number two. The State isn't just a more effective provider of pensions than the private sector, it is also more cost efficient.
Public sector pensions are provided on a pay-as-you-go basis. There are no management fees taken out, no administration charges siphoned off and no hidden costs of trading deducted. Every cent that public servants and the taxpayer put into public service pensions gets paid out in pension payments. The system uses the existing payroll infrastructure and thus is virtually free of administration costs. Not so private pension funds.
And on top of these fees and charges there is the pension fund money lost on the stock market. In 2008, Irish pension funds lost 37.5pc of their value, although some of this has been recovered this year.
Some private sector workers have looked at the losses incurred by their pension funds and asked "why haven't public sector workers taken a hit too?" They should have asked: "What happened to my money?"
Because a 37pc loss wasn't inevitable. The OECD report Pensions at a Glance 2009 showed that the performance of Irish pension funds in 2008 was the worst of all 30 countries surveyed. The reason was two-thirds of Irish funds were invested in risky equities compared to a little over one-third in other countries.
However, the really shocking statistic in the OECD report was this: more than 30pc of Ireland's pensioners live in poverty. An enhanced State pension available to all is a necessity.
Public servants do not have 'Rolls Royce' pensions and as the C&A report shows, they cover most of the cost of their pensions through their own contributions. The real pension scandal is that many private sector workers don't even have 'bicycle' pensions in spite of years of sustained growth and increased productivity.
In between death and taxes, those two great certainties, comes old age and the need for a pension. It's time to decide how serious we are about an old age free from poverty for us all.
Irish Independent
now can we shut up about pensions and get back to the pay cut
Unions plan second strike before budget
i feel that this goverement is about to fall because of public sector strike action

I don't accept that article as fact as it omits a lot of factors. The pay as you go system means that there is no opportunity for the employees contributions to actually grow with increased productivity in world markets. The stock market (whatever you say about it) has historically ALWAYS outperformed every other investment vehicle. There are risks and crashes, but the overall trend has always been upwards. If I had bought shares before the 1929 crash, I'd still have made a better return today than if I'd stuck it in the bank.

The state pension has no cost associated with investment only because it doesn't invest the money and just takes it from current taxation. This means the money is wasted. It only appears to 'work' because the state can always increase taxation or BORROW (and then repay plus interest!!) to pay the current pensioners. Scale it down to a private company with a defined benefit scheme-no possibility to simply charge the current workers more or to realistically borrow (and repay with interest) to pay current pensioners, so many many defined benefit schemes in the private sector have gone belly up. The normal state pension is also pay as you go (defined benefit) and almost every country in Europe has a pensions crisis looming, including ireland but ours is further away thanks to our younger population.

murphaph

NewDubliner wrote: »

That's a bit coy. Your pensions costs somebody else money and you don't care about the ethics of how the money is found. Yet, public-sector pensions also cost somebody else money, based on democratic, legal taxation and you consider that to be wrong.

How does it cost someone else money? I invest my pension in shares. I am buying a tiny part of IBM or whatever and hoping that as time goes on IBM does well and makes more money, for which I will get a dividend every now and again and hopefully come maturity I will be able to sell my shares on to the next generation for a profit. As I said, you can specify ethical investment funds in at least some schemes nowadays.

The difference is that the money from a defined contribution scheme comes from the industry of the IBM (etc.) worker who also has a vested interest in making IBM (or whoever) stronger as he will earn more money. What's the problem? Are you trying to say that all private sector pension funds are evil and we should all use a defined benefit model? Where would the money come from? You'd have to put about 60% of your salary into your pension every month as unlike with the public sector, the private sector employee's employer can't simply jack up the cost of his product or borrow the cash to pay the pension.

NewDubliner wrote: »

You've also batted past the wretched situation of private sector workers whose pension contributions have vanished because of the unreliability of their schemes. Why on earth would you hold up such a plan as an ideal and try to impose it on others?

All the high profile pension fund scams/scandals (waterford/Robert Maxwell etc.) were DEFINED BENEFIT. This sort of theft from employees is impossible in normal defined contribution schemes as pension money is handed over by the employer to a pension fund manager who usually works for one of the large financials. Many defined benefit schemes have collapsed because they don't work unless you can somehow jack up the cost for the current contributors (like taxing the general public) or borrowing the money (and later repaying it with interest). Private companies can't do either of these tricks, only a government can.

NewDubliner wrote: »

You have not answered the question about fees and costs. How much is charged by 'pension advisors', do they get it up front or is it performance based?

Pension fund managers take a certain percentage of course, they have to earn a living too and it's actually a pretty stressful job as far as I know. I believe some schemes are performance based and some aren't.

NewDubliner wrote: »

Is this because the answer might undermine your demand?

No, it's because I don't know exactly what proportion of the public sector pay class A PRSI and it appears (from your failure to volunteer a figure) that you don't either, so I suggested dropping the point.

NewDubliner wrote: »

This is the essence of your proposal. A defined contribution with a dubious return.

The only reason your defined benefit scheme offers a guaranteed return is because the workers of the future will be taxed to the hilt to pay it or their children in turn will be repaying the interest on the monies borrowed to pay you. It is not the equitable model you portray at all.

NewDubliner wrote: »

You're certain that this is true? I hear bank pension schemes pay out quite well.

Probably, but the banks are an (unregulated) law unto themselves and do not in any way shape or form represent the majority of the PAYE private sector who will be paying for your pension. whenever the private sector is mentioned you state that the banks the banks the banks...but you see the banks are only a tiny part of the private sector and 99% of people in the 'real' private sector hate the banks even more than you do.

NewDubliner wrote: »

While the 'financial services' industry is up in the corporate box eating and drinking our contributions?

Only if the public servants let them.

OMD

seangal wrote: »

This should end all the crap about pension
I did not take the job i have for the pension and being honest i did not even know what pension i would get.
Wednesday November 11 2009 independent


In view of the prevailing wisdom that public servants have 'Rolls Royce' pensions, it's surprising that the recent Report of the Comptroller and Auditor General on Public Service Pensions didn't make waves in the news. Perhaps it's because the figures it provides don't actually back up the 'Rolls Royce' theory.
The C&AG put the employer cost of a primary teacher's pension at 7.2pc of salary, a far cry from 19.4pc in the last benchmarking report.

I am not really sure what your point is. Based on what you are saying public service employees should have their pension levy increased by a further 7.2%. That sounds fair enough to me. Makes a mockery though of those public servants complaining about the levy in the first place. It seems the only problem is that is isn't nearly high enough.

Oh and of course make sure you add in a couple of % extra to cover the in service death benefit and the superb sickness cover.